News

August 11, 2015

Online auctions still ‘coming of age’ despite benefits

As is the story with much of modern life, the most significant change of recent years has been the growth of the Internet.

The philatelic auction business is no different, and as bidding moves increasingly onto the Internet, both consignors and collectors – as well as the auctioneers moving everything across the block – are wondering if it’s for the best.

All things considered, it has never been easier to learn about philately, said Chris Carmichael, vice-president of Vance Auctions. Collectors now have access to a broad spectrum of philatelic material that was much less accessible in the past, and the benefits abound, especially when it comes to buying and selling at auction.

“Definitely the biggest change has been the advent of the Internet,” said Carmichael, who added Vance Auctions is somewhat unique in that it’s a mail auction house without an auction floor. “Nonetheless, we’ve noticed a steady shift towards online platforms and would say that now the majority of our bids are received in this manner.”

Charles Verge, esteemed historian and CEO of Brigham Auctions, which does about 80 per cent of its business online, agreed the auction scene has changed in recent years.

“It’s not what it used to be – people filling the room, no extra chairs, bidding all around – unless it’s a busy, busy sale and a lot of people are interested and want to view the material beforehand.”

Both Carmichael and Verge said it is convenience leading the charge to the Internet.

“It’s most convenient to be able to review lots and bid at your leisure,” said Carmichael. “It doesn’t necessarily have to happen during regular business hours. The average bidder can login late in the evening or early in the morning in the convenience of their home or office.”

Likewise, Verge said there are now many more platforms to place bids from than in the recent past.

“If you’re a subscriber to Stamp Auction Network, you’ll find a lot of auctions you would not normally be aware of or have the availability to get the catalogue for.”

What’s more, Verge said many firms charge for their catalogues because of the costs incurred in producing them; however, these catalogues are often found online for free.

“And in general, the images online give the buyer a far better view of what he or she is buying. Also, they don’t have to go to the auction firm a day ahead to view the lots.”

But when it comes to online bidding, Carmichael said, opposite the hand of convenience is the loss of personal interaction with other bidders and collectors.

“You lose the connection that may have been shared by speaking to someone over the phone (or in person).”

And while a bidder might lose out on the social connection when opting to bid online, there are other, more technical things to consider, too.

“You don’t have the opportunity to view the material in situ,” said Verge, “so you don’t have the opportunity to look at the back and the gum and the general condition of an item.”

And that’s important, said Verge, who added if he were a high-end spender, he’d prefer to be present and examine the material before placing a bid.

However, he said: “I don’t think there’s a major drawback to bidding online simply because you always have the opportunity to return the material if it’s not as described.”

And if choosing the online route, Carmichael advised bidders to keep up to date on his or her bids.

“The auction business has evolved into a last minute business,” he said. “Everybody wants to be the last person to make a bid, and auction sniping is prevalent. I think the most frustrating news for a bidder is finding out your prized auction lot sold for one increment higher than your original bid.”

COMING OF AGE

While the online bidding platform has made waves across the auction scene as of late, some are still showing caution.

“Online bidding is a relatively recent event, so yes, obviously there has been some degree of movement to the Internet, but it really hasn’t come of age yet, and those who participate in many auctions will tell you that a very high percentage of the more-important lots in any sale will sell to the floor,” said Gary Lyon, owner of New Brunswick’s Eastern Auctions. “On the other hand, many bidders have told us that they find our website a valuable tool when preparing their bids. We are often able to photo more items, and of course, the scans often provide a larger image than in a printed catalogue.”

In fact, Lyon – a lifelong philatelist and auctioneer since the mid-’70s – said he believes the biggest change in stamp auctions hasn’t been how material is being purchased but rather who is doing the purchasing.

“The main change in stamp auctions is that they are now less dealer-driven and more collector-driven,” he said. “Collectors buy a higher percentage of their material from auctions now and less from traditional retail dealers.”

And one of the issues with online auctions, said Lyon – and the one that especially worries advanced collectors and experienced auctioneers – is when bidding “progresses too slowly.” As a result, he said, these collectors will often forgo this type of sale altogether.

Verge agreed online bidding is sometimes a “much slower process.”

“When you have online bidding, there’s a delay in the process, so instead of 150 or 160 lots an hour, you do about 100,” he said. “The ones who get frustrated are the ones who are sitting in the room.”

But for those who participate online, Lyon said online bidding could provide a way for bidders to see what lots are selling for on a real-time basis.

“However, I think bidders should know how much they’re willing to pay for something they need and not be influenced by bids they see from others. My advice is to know what you’re bidding on and deal only with experienced auction houses who have the time, resources and expertise to properly evaluate and describe material.”

Recent Posts

Hearings into Canada’s largest active pay equity case began earlier this week. At the end of collective bargaining in 2016, the Canadian Union of Postal Workers (CUPW) and Canada Post reached a separate agreement to expedite the pay equity process for Rural and Suburban Mail Carriers (RSMC). A joint committee was established to study RSMC pay […]